Digital Operational Resilience Act (DORA) – an innovative regulatory framework that addresses risks posed by the digital transformation of financial services as well as the increase in volume and severity of cyber attacks within the sector. DORA, sometimes referred to as "Data Oversight and Risk Assessment", is a framework for Third-Party Risk in the European Union (EU) specifically for Financial services organisations, designed to revolutionize the way businesses in the European Union manage and mitigate third-party risks. Developed collaboratively by regulatory authorities, industry experts, and technology leaders, DORA aims to bolster the EU’s data protection measures while promoting innovation and trust in cross-border business relationships.
Which organisations are impacted?
- Banks/Payments and e-money providers
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Insurance providers
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Reinsurance providers
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Capital markets entities
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Brokers/CSDs/CCPs
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Investment firms/Pension Funds
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Credit Institutions/Credit rating agencies
In an increasingly interconnected and digital world, reliance on third-party services and partnerships has become ubiquitous in modern business operations. While these collaborations offer a plethora of opportunities and efficiencies, they also expose organizations to potential risks that can disrupt operations, tarnish reputations, and compromise data security. As the European Union’s regulatory landscape evolves to keep pace with the fast-changing dynamics of the global economy, a pressing need arises for a comprehensive and unified framework to address third-party risks effectively.
One of the key principles of DORA is its emphasis on data protection and privacy. With the ever-growing threat landscape and the increasing value of data, safeguarding sensitive information has become a top priority for organizations across all sectors. DORA recognizes this and seeks to establish stringent guidelines and best practices that will ensure the secure handling of data in third-party relationships. By doing so, it fosters a culture of trust and integrity, strengthening the foundation of cross-border business collaborations.